Why Budgeting Doesn't Work
“I can’t manage my money” ---Why you are not a failure!
In my initial career as a loans, mortgage, and collections officer I worked with numerous people setting up personal budgets and in special circumstances of layoff or illness, developed a more detailed process of review and extending the funds that they had available. As with any program or schedule there were those clients who succeeded and those who just could not make it work, the one difference was the way they thought about, understood, and made sense of “how, why, where, and when”, they made purchases. You may have noted the new weight control program, it also works on the same principle, making sense of ‘why we do what we do’ or a psychological perspective. The individuals who developed a mindful attitude towards spending, tended to be successful. Yes, this sounds like it is getting off track with words like “mindful” but bare with me and I will give you an example of what I mean.
You go to buy a lawnmower, there is a sale on a base model that is perfect for your needs. When you speak to the salesperson, they tell you that the ‘what-ch-ma-call-it’ could be faulty and may not last and you should go for the one with the ‘thing-ma-gig. We don’t want to appear stupid, because we don’t understand ‘what the part is or what it does’ so rather than ask and feel foolish, we go for the more expensive model with all the bells and whistles---the one we really did not need or want. If, however we stop to think about the information provided by the salesperson, we will have some questions like: Why are you selling a lawnmower that might be faulty or does not last long? Why are you using words that only an engineer would comprehend?
Once we stop to understand--- noticing and making sense of the process---from our initial desire to get a base lawnmower to ultimately, buying a lawnmower with more technical equipment than the first Apollo flight, we have the opportunity to make a choice based on facts NOT feelings. So, how do we develop ways of being mindful when making purchases? Well, it can be looking at, talking about, and making sense of ‘how we see ourselves in the world’ in tandem with the sales techniques that enlist and engage a practical understanding of how the brain works in driving our spending. And as I will discuss in later blogs, I was also a casualty of such techniques, and can speak to how we might better understand and address the environment that creates such vulnerability.
Over the next discussions we will be looking at developing new practices (habits) around our approach to understanding and spending money.
Mark Twain stated: “Habit is habit, and not to be flung out of the window…. but coaxed downstairs a step at a time”.